Special Economic Zones in the OIC Region:
Learning from Experience
27
sustainable practices, but further research is needed to find out what practices are actually
employed and how well they work in particular circumstances.
3.3 Development of Cross Country and Tripartite SEZs
As the number of SEZs increases globally and they are increasingly seen as a policy tool to attract
investment, it will become increasingly important for zones and countries to look beyond
administrative borders and develop integrated approaches to SEZ development; particularly
with regards to legal and regulatory frameworks such as export policies and fiscal incentives. It
is suggested that the rapid expansion of regional trade agreements (RTAs) offers the potential
for SEZs to focus on logistics or cross-border trade and to facilitate regional synergies, although
it is acknowledged that to date there have been limited efforts by SEZ programmes to create
these synergies. 33
Whilst examples to date concerning cross country SEZ programmes are limited there are a few
notable example of previous and future programmes which have focused on border trade. These
are discussed in the boxes below.
Box 7 - Central America Maquiladoras Programme34 35
33 Koyama, N (2011) SEZs in the Context of Regional Integration: Creating Synergies for Trade and Investment.
3
35 Farole, T and Akinci, G (2011) Special Economic Zones: Progress, Emerging Challenges and Future Directions.
Maquiladoras are companies which are wholly or predominantly owned by foreigners. The role
of these companies is to assemble products for export to US or other foreign markets.
Macquiladoras are subject to special customs treatment, less expensive labour costs and lower
operating expenses. Once a Maquiladora Permit has been obtained from the relevant
government, the Maquiladora has the right to import raw materials duty free into the country of
origin for manufacturing, assembly, repair or other processing.
This programme first adopted in the Domincan Republic, Mexico and Honduras in the 1960s and
was designed to take advantage of cheap labour costs within the countries and to attract
manufacturing industries who wished to export to US markets.
In Mexico a Border Industrialisation Programme was adopted in 1965 to increase employment
opportunities for Mexican workers returning from US following the demise of the Bracero
Programme. It is estimated that there are now over 2,800 Maquiladora companies operating in
Mexico, of which over 90% are located within the border zone and account for over 55% of
Mexico’s exports and employing over 1.1 million people.